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Property Insurance

shutterstock_404272390Commercial property insurance helps businesses pay to repair or replace buildings and other property damaged or destroyed because of fires and storms, replace stolen or lost property and even pay for lost income. Business owners can buy commercial property insurance regardless of whether they own or lease a building. These policies will provide either replacement cost or actual cash value coverage.

Types of Loss Settlement

  • Replacement Cost coverage will pay to rebuild or repair your property, based on current construction costs. Replacement cost is different from market value and doesn’t include the value of your land.
  • Actual Cash Value coverage will pay to rebuild or replace your property minus depreciation. Depreciation is a decrease in value due to wear and tear or age. If your business is destroyed and you only have actual cash value coverage, you may not be able to completely rebuild.

Common Property Coverages

  • Buildings owned or occupied by the insured.
  • Business Personal Property– would include property such as; desk, equipment, supplies and inventory at your business location.
  • Business Interruption coverage pays for the income you’d lose if your business is damaged and you can’t perform your normal business operations.
  • Valuable papers coverage provides limited coverage for your business records and other valuable papers. You may be able to buy an endorsement to increase this coverage.
  • Ordinance or law coverage pays additional costs to repair or rebuild a facility to current building codes after it’s damaged. Many policies provide limited ordinance coverage, but you can increase it with an endorsement.
  • Boiler and machinery coverage covers boilers, air conditioning units, compressors, steam cookers, electric water heaters, and similar machinery. Coverage is usually only for machinery listed in the policy and to any subsequent losses, such as when a boiler explosion or water heater leak causes damage to other property. You can usually buy this coverage as an endorsement or a separate policy.
  • Inland marine coverage insures property in transit or anywhere away from your primary business location. It can also covers projects under construction.

Other Coverages to Consider

Depending on the type of business you own and where it’s located, you might want to consider more coverage to protect your business.

Crime Coverage– Loss of glass and money due to theft pays for damage to glass and for a theft of money resulting from a break-in. Forgery or alteration protects your business against forgery or alteration of checks, drafts, promissory notes, or other types of payments.

Flood Insurance -Some insurance companies include flood coverage in their commercial property policies for areas with a low flood risk. However, most flood insurance is available only through the federal National Flood Insurance Program (NFIP).

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